In the recent case of Importers Service Corporation and another v Aliotta and others [2026] EWHC 533 (Ch), the High Court had to decide whether a series of share transfers, made by a defendant facing two separate claims against him, could be unwound under section 423 of the Insolvency Act 1986 (“s.423”). The court found that some of the transfers were caught, but others were not once the whole exit arrangement behind them was taken into account. Applying the approach adopted in Invest Bank v El-Husseini, the decision confirms that where a transfer forms part of a wider connected package, the court will look at the value received under that arrangement as a whole, not just the price stated on the document.

Background

The claimants in the case were ISC US, a company that imports gum Arabic from Africa, and its subsidiary, ISC Europe, which buys the processed product from ISC US and sells it on in Europe (together, “ISC”). Mr Mario Aliotta (“Mr Aliotta”), one of the defendants, sourced African suppliers for ISC US for many years, and was also a director of ISC Europe.

In 2022, ISC US commenced proceedings in New Jersey against Mr Aliotta and his company, Aliotta Holdings Ltd (“AH”), variously in conspiracy, breach of loyalty and unjust enrichment (the “US Proceedings”). In 2024, ISC Europe brought related Chancery Division proceedings against Mr Aliotta and AH for breach of fiduciary duty (the “Main Claim”).

During the proceedings, ISC was concerned to ensure that Mr Aliotta and AH would still have assets available if either claim succeeded. AH’s most valuable asset was its shareholding in a property-owning company, WSA Construction Ltd (the “Company”), which had been set up as a joint venture between AH, Mr Sleater, and Mr Whitehead (acting through his company, Oakwood Property Solutions Ltd, “Oakwood”) (together the “Investors”).

At the outset of the venture, AH held an enlarged shareholding to reflect Mr Aliotta’s expected contribution of “Property B”, which was never transferred. In September 2022, after the US Proceedings had commenced, the Investors agreed to rebalance the shareholdings to reflect their true economic contributions, mindful of the enforcement risk to AH’s stake.

On notification of the Main Claim in 2024, backdated board minutes were created to evidence the Investors’ agreement to reallocate shares accordingly. AH then transferred 34 shares to Mr Sleater, 18 shares to Mr Whitehead, and the remaining 64 shares to Mrs Aliotta, leaving AH with no shares.

In 2025, the other Investors acquired the 64 shares held by Mrs Aliotta for around £90,000. The transfer formed part of a wider exit arrangement under which Mr Aliotta was also to receive: (i) the return of the other Investors’ investments in AH, valued at £165,000, (ii) £50,000 from the Company, (iii) a rent-free lease of part of the Company’s office space, worth around £25,000, and (iv) the assignment of a £50,000 receivable. The repayment of Mr Aliotta’s director’s loan also formed part of the overall transaction mechanics.

ISC, as contingent creditors under both the US Proceedings and the Main Claim, brought this claim under s.423 of the Insolvency Act 1986, alleging that Mr Aliotta had caused AH’s shares in the Company to be transferred away in order to keep them beyond ISC’s reach.

S.423 of the Insolvency Act 1986 allows a court to unwind a transaction if it was made at an undervalue (for no consideration, or for significantly less than it was worth) and the person making it intended to put assets beyond the reach of someone who was making, or might make, a claim against them.

The court’s decision

The court reached different conclusions on the 2024 and 2025 transfers.

The 2024 transfers were held to fall within s.423. The court noted that the settlement with the Investors was agreed shortly after the US Proceedings were commenced, and that the 2024 transfers were only actually carried out once Mr Aliotta had been notified of the Main Claim. Although Mr Aliotta may have regarded the reallocation of shares as morally justified, the court found that one of his purposes was to put assets beyond ISC’s reach. The transfers were also for no valuable consideration.

On the 2025 transfers, the court accepted that one of Mr Aliotta’s purposes was to avoid the shares falling into ISC’s hands. However, s.423 was not engaged because the 2025 transfers were not transactions at an undervalue:

• The question before the court was whether consideration should be assessed by looking at the stated share sale price only, or at the wider arrangement. The court held that it would be “perverse” to look only at the share component: the transfer formed part of a broader exit arrangement under which Mr Aliotta received value from several connected elements.
• The court relied on the broad approach to “transaction” under s.423 and the reasoning in Invest Bank v Husseini, where the owner of a wholly owned company was treated as the economic owner of its assets, such that a disposal of those assets could be viewed as a disposal by him. The court described the present case as the “mirror image”: the Company disposed of assets on its owner’s instructions as part of an arrangement under which the owner received the benefit.
• On that basis, the court held that it would be “contrary to the rationale” of Invest Bank not to take that benefit into account when evaluating whether the 2025 transfer was at an undervalue.
• The court treated Mr Aliotta and AH as, in substance, a single economic unit for these purposes. The Main Claim was against both of them, so value moving between Mr Aliotta and AH did not itself prejudice ISC; it was equivalent to “moving money from one pocket to another”.
• The court therefore counted not only the cash paid for the shares, but also the other benefits received by Mr Aliotta as part of the same package. It excluded repayment of the director’s loan, treating that as repayment of an existing debt rather than consideration for the shares. On that approach, the value received by Mr Aliotta was approximately £380,000, compared with the court’s valuation of the shares at approximately £240,000.
• The 2025 transfers were accordingly not transactions at an undervalue. That remained the position even though the stated share price was materially lower than the shares’ value, and one of Mr Aliotta’s purposes was to keep the shares away from ISC.

The court reversed the 2024 transfers to Mr Sleater and Mr Whitehead, returning 52 shares to AH. It made no order in respect of the 64 shares transferred to Mrs Aliotta. Although that transfer was itself caught by s.423, reversing it would have made no difference to ISC’s position, because the 2025 sale to Mr Sleater and Mr Whitehead would have gone ahead on the same terms whether the shares were held by Mrs Aliotta or by AH, leaving AH with the proceeds rather than the shares.

Conclusion

This decision shows that, for s.423 purposes, value received is not always measured by the price recorded on the transfer document. Where a transfer is part of a connected package, the court may look at the value received under the arrangement as a whole.